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Is the DOL Using the Right Words?

I’ll never forget my first village meeting as a newly minted newspaper reporter.

The specific village is unimportant, but it is a small hamlet sitting on the Hudson River in upstate New York. The year was 1996. The weekly newspaper I worked for has long since ceased publication, but you can imagine the small-town news fare it feasted upon.

I didn’t realize the implication at first (after all, I was greener than an Irish pub on St. Patrick’s Day), but this meeting was unusually packed for a Monday evening. I quickly absorbed the tension in the air.

I had stumbled into a small-town showdown. At my very first meeting, no less -- what luck!

And then it got even better. Hotshot mayor, let’s call him Keith (because that’s his name), had the good sense to shape his thoughts into a prepared statement.

It’s a lesson some presidential candidates have yet to learn. But I digress.

The room was decidedly on the side of strong, silent, superintendent dude. Perhaps that made Keith nervous. Maybe Keith was an outsider in this town. Apparently I wasn’t that good of a reporter yet.

Anyways, he reads what amounts to a public firing, which is incredibly uncomfortable to witness.

Then Keith gets to the part where he wants to say “this is a personnel decision.” And, you know, not at all related to the plainly obvious fact that I do not like this guy and want him to know this is my town.

Right. Except Keith misspeaks and he says “this is a personal decision.” Oops, I believe they call that a Freudian slip. Like where you say what you really mean and not the BS you’ve carefully put to paper.

I don’t remember many details of that long-ago meeting, but I can still see poor Keith’s reaction to his gaffe. He stammered and nervously chuckled a bit. And he got very red in the face.

But nobody else laughed. It was that kind of a meeting.

Let’s face it – I share this story because it’s funny as heck. But also because I can talk about words and how the wrong word -- or even the wrong pronunciation of the right word -- can bring about unwanted headaches.

There’s been plenty of attention given to the 1,023 pages of words the Department of Labor published as its fiduciary rule in April. In particular, industry watchers are concerned about liability associated with expanded definitions of “fiduciary” and “investment advice.”

“Jim Cramer is a fiduciary under this rule,” said Philip D. Bartz during a hearing Thursday in U.S. District Court for the District of Columbia.

Bartz represents the National Association for Fixed Annuities in the first of three lawsuits against the DOL. NAFA seeks a preliminary injunction.

Cramer, of course, is the flamboyant host of CNBC’s “Mad Money.” For the record, opponents dismiss the Cramer argument, noting that only advice directly compensated for is covered by the fiduciary rule.

But concerns remain. Are the phone support folks who help customers with account questions going to be fiduciaries? Does the “best interest” standard the DOL desires always mean the best price?

The DOL says it doesn’t, but when a miffed client comes up with a couple words of their own, as in “you’re sued,” who knows how a judge will see it?

“They are going to have their butts sued off,” Bartz said.

Now there are a few words nobody wants to hear.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com.